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Using put-call parity, you can form a synthetic long stock position by: A) Buying a risk-free bond, buying a call option, and buying a put option B) Buying a risk-free bond, selling a call option, and selling a put option C) Buying a risk-free bond, buying a call option, and selling a put option D) Buying a risk-free bond, selling a call option, and buying a put option

Finance Dec 24, 2020

Using put-call parity, you can form a synthetic long stock position by:

A) Buying a risk-free bond, buying a call option, and buying a put option

B) Buying a risk-free bond, selling a call option, and selling a put option

C) Buying a risk-free bond, buying a call option, and selling a put option

D) Buying a risk-free bond, selling a call option, and buying a put option

Expert Solution

Using put-call parity, you can form a synthetic long stock position by: Buying a risk-free bond, buying a call option, and selling a put option

Option C is correct.

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